UK Property Shortage Until 2016

More than 600,000 families will be forced to rent homes over the next five years because of a lack of adequate housing, according to a new study.

Research by the Construction Products Association (CPA) found that while 714,000 new homes will be built by 2016, 1.3m new households will be created during the same period, leaving a shortfall of 622,000.

Although the housing market is presently experiencing a record-low in housing activity, only 102,570 homes were built last year; the lowest number since 1923.

CPA’s economics director, Noble Francis, believes the deficit will have a huge impact on the UK housing market.

He said: ‘It will clearly lead to a massive pent-up demand, sustain prices higher than they would be given this demand and make things even harder for first-time buyers, who are more prone towards buying new build.

‘It will also lead to a greater rental demand, pushing up average rents and exacerbating problems within the housing market, especially worse for young people who cannot buy.’

In related news, earlier this week, Richard Donnell, director of research at the UK’s leading provider of residential property and housing information, Hometrack, claimed that house prices will drop by around 1% over the next eight months.